What to expect in 2025

After a break in our monthly updates in December, we start 2025 with a detailed update on the Employment Rights Bill (the Bill), and some other changes you can expect to see in the Employment Law arena, in the coming year.

Click the links below to read more:

• • Re-cap on the Employment Rights Bill
  • Amendments proposed to the Bill
  • Other changes to expect in 2025

 

Re-cap on the Employment Rights Bill

This month, in January 2025, the House of Commons completed the Committee Stage of the Bill’s passage. The Bill will now progress to its Report Stage, where further amendments may be considered, followed by a third reading. No dates have yet been set for those upcoming stages. Note that the Bill is not yet law, and its provisions will only come into effect after additional regulations and consultations. For example, unfair dismissal reforms are not expected to come into force before autumn 2026.

Here is a reminder about the proposed changes we already know about:

Job Security

• Day-one unfair dismissal: Employees will gain protection from unfair dismissal from day one, replacing the current two-year qualifying period. The bill also introduces a ‘light-touch’ dismissal procedure for employers to follow during an initial (probation) period of 3- 9 months.

• Zero-hours contracts: Employers will need to offer guaranteed hours based on typical working patterns, with compensation for last-minute cancellations.

• “Fire and Rehire”: The bill proposes to make it automatically unfair to dismiss workers for rejecting contract changes, unless justified due to financial difficulties which threaten the employer’s ability to carry on business as a going concern.

• Redundancy: Multi-site employers will need to count redundancies across the whole business for consultation thresholds, rather than per ‘establishment’. The government is also considering raising the protective award (financial penalty) for employers who fail to meet their legal obligations to collectively consult, and allowing interim relief for claims involving protective awards or unfair dismissal in fire and rehire cases.

Family-Friendly and Flexible Working

• Paternity, and parental leave: Would become a day-one right, with restrictions linked to shared parental leave removed.

• Pregnancy and maternity: Protections against dismissal for employees recently pregnant or returning from leave are also to be strengthened.

• Bereavement leave: Would be expanded to include non-child-related losses as a day-one right.

• Flexible working requests: Employers will need to explain why their refusal of a request on one of the eight statutory grounds is reasonable.

Equality and Wellbeing

• Sexual Harassment: Employers must take ‘all reasonable steps’ to prevent harassment (including third-party harassment), with stricter duties and higher tribunal penalties.

• Whistleblowing: Reporting sexual harassment will be a protected disclosure, with no qualifying service period and unlimited compensation in related claims.

• Gender Pay Reporting: Employers with more than 250 staff would need to publish annual action plans addressing equality action, including gender pay gaps and menopause support.

Fair Pay

• Statutory Sick Pay (SSP): Would be paid from day one, removing the three-day waiting period and minimum earnings requirement.

• Fair pay agreements: Labour has suggested that fair pay agreements would be introduced for sectors like adult social care and school support staff, to improve wages and conditions.

• Tips/gratuities: Employers would need to consult workers when drafting policies in relation to tips.

Trade Union Rights

• The bill would simplify union recognition processes and strengthen protections for unionised workers, including repealing the Strikes (Minimum Service Levels) Act 2023 and repealing or rolling back most of the Trade Union Act 2016.

Enforcement

• Fair Work Agency: A new enforcement body is planned by the government, to oversee compliance with employment laws, including tribunal awards and holiday pay.

 

Amendments proposed to the Bill

Several amendments were proposed at the committee stage, and all government amendments have been approved by the committee. Here are some examples of the proposed amendments:

Increase in tribunal limits:

• This change, which is the most significant amendment, would increase the limitation period for employment tribunal claims from three to six months. This change provides employees with a longer time to initiate claims, to seek legal advice and prepare cases.

Guaranteed hours:

• This amendment would require employers to inform zero-hours and low-hours workers about their rights to request guaranteed hours during an ‘initial information period’ and formally notify them of any exceptions. This measure aims to provide more predictable working hours for individuals on zero-hours contracts, enhancing job security.

Public sector outsourcing:

• This amendment re-drafts the bill to prevent a ‘two-tier workforce’ under the Procurement Act. The purpose is to ensure that, where public services are outsourced, the contractor’s direct hires are not treated less favourably than the incoming public sector workers and vice versa.

Union access:

• This amendment would restrict workplace access rights to unions holding a certificate of independence only. This change would mean that that only ‘qualifying’ independent unions can benefit from the access to work places provisions.

Statutory Sick Pay (SSP):

• This change to the bill extends its SSP provisions to Northern Ireland. The aim of this change is to harmonise SSP entitlements, ensuring that all eligible workers receive consistent support during periods of illness.

Equality action plans:

• This amendment to the bill would require employers to include an explanation in their equality action plans on how they are addressing the gender pay gap and supporting employees going through the menopause.

 

Other changes to expect in 2025

Here is a list of what else you should be keeping an eye out for this year:

Neonatal leave and pay:

Statutory leave for parents of babies requiring neonatal care (up to 12weeks within 68 weeks of birth) is to come into force by April 2025.

Artificial Intelligence (AI) in the workplace:

AI, including machine learning, generative AI (GenAI), and automated decision-making, is increasingly used in recruitment, HR, and broader workplace management. The Government’s 2024 Next Steps to Make Work Pay policy paper indicates that, to keep a handle on employers’ surveillance of their employees, the Government is suggesting that any proposals to introduce workforce-monitoring AI tools should be subject to consultation (and potentially negotiation) with unions or staff representatives.

The King’s speech in 2024 also signalled new legislation to place obligations on developers of the most powerful AI models.
The UK has also signed the Council of Europe’s Framework Convention on AI and Human Rights, committing to align domestic AI usage with principles of democracy and the rule of law.

We suggest that employers should undertake risk assessments and due diligence before implementing AI models – to address potential discrimination, data privacy breaches, and workforce relations issues and to prepare ahead of potential incoming legislation in this area.

Right to disconnect:

Followers of the news may have been surprised to see there was nothing in the Bill about the ‘right to switch off’, to prevent workers being contacted outside working hours, which was included in Labour’s Plan to Make Work Pay. The government has now confirmed that the right to disconnect will be addressed through a statutory Code of Practice, with consultations on its implementation expected in 2025.

Draft Equality (Race and Disability) Bill:

The Draft Equality (Race and Disability) Bill, announced in the 2024 King’s Speech, aims to advance equality for ethnic minorities and disabled people. Led by the Government Equalities Office, the Race and Disability bill will undergo significant consultation and is expected to progress more slowly than the Employment Rights Bill.

The Race and Disability Bill will tackle two main issues:

1. Enshrine in law the full right to equal pay for ethnic minorities and disabled people.
2. Introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees.